Roll on a week and Chancellor George Osborne has suddenly gone cold on the idea of a sell-off of RBS shares any time soon.

At this week's Mansion House speech, Osborne fired the starting gun on a sell-off of part of the government's 39% stake in Lloyds Banking Group, and announced a review into whether RBS should be broken up into a good and a bad bank. He even uttered a phrase that few had expected to hear: "With hindsight, I think splitting RBS into a good bank and a bad bank was probably what should have happened in 2008."

This is the same chancellor who, when questioned by one of his predecessors, Lord Lawson, earlier this year about such a split, dismissed the idea as too difficult and too expensive. To facilitate a break-up, his argument ran, some £10bn or so of taxpayer funds could be needed to buy up the portion of the bank the government did not already own, and he was not going to throw any more money at the bailed-out bank.

Instead the remarks Osborne made in February prompted the flurry of speculation that a sell off-of RBS was on the cards before the May 2015 general election. Hampton said that the bank could even get a sale prospectus together by mid-2014. Indeed, last weekend, Hampton was making it clear that he was also in the departure lounge: once Hester's successor had their feet under the table, he too could leave.

But now there will be a review to consider whether RBS can be broken up without any extra taxpayer money. It is to be completed by September.

That could well be a tall order. Under pressure from the outgoing Bank of England governor Sir Mervyn King to break up RBS, and from his coalition partner Vince Cable to take his foot off the pedal on an RBS sell-off, the chancellor could well have set the bar purposely high to ensure that he does not need to carve up the bank.

Commissioning the review may just allow him to show his political partners that he has considered all the options – and then rule out a break-up. After all, work on a "bad bank" solution has been done before – by the Treasury in 2010 – and rejected. If it was not worth it in 2010, can it be worth it now, five years after the bailout?

But even if the review is nothing more than politicking, it is extremely destablising. Staff who had been preparing for a flotation are left in limbo. Senior staff may decide to look elsewhere to further their careers.

And headhunters seeking replacement for Hester now have a very difficult story to tell any potential new recruit. The task was hard enough anyway without the new confusion caused by a chancellor potentially changing its direction.

Is a new boss being hired to run a bank that's being prepared for a sell-off and then set to run like a commercial operation? Or will the boss be asked to split the bank, restructure it and only then prepare for privatisation? That latter role sounds remarkably like the job Hester has been doing for the past four years.

It is a situation created by a chancellor without a strategy for the banking sector, conducting U-turns and creating confusion. Osborne needs a plan of action. And fast.

An end to debt and taxes?

While potentially breaking up RBS – and banging up reckless bankers – were the most attention-grabbing of the proposals in last week's report from the parliamentary commission on banking standards that grabbed most attention; but, the high-powered group of MPs and peers also said that a banking system more fit for purpose might require a historic shift in Britain's tax regime.

Like many countries around the world, the UK allows companies to offset interest payments on debts against their profits before they pay corporation tax. Campaigners against highly leveraged private equity takeovers have long argued that this creates an artificial incentive to load firms up with debt.

The commission echoed that claim, suggesting that banks have tended to fund themselves overwhelmingly through borrowing, instead of by raising equity capital from shareholders on the financial markets, at least partly because of the tax benefits of so doing.

The same principle was highlighted again last week in revelations from an unnamed executive about Cadbury's tax affairs, which suggested that long before its controversial takeover by US food company Kraft in 2010, Cadbury was using "aggressive" tax avoidance schemes, including loading up on debt in the UK in order to reduce its taxable profits here.

Yet it hardly makes good economic sense to encourage firms to take on more debt. Just as a homeowner with a 95% mortgage is more vulnerable to a falling market than someone who put down a 30% deposit before buying, any company that relies heavily on borrowing will be left far more exposed to fluctuations in trade, or increases in interest rates.

It's surely time to look again at the tax treatment of debt. As the commission put it: "But at the very least, having a tax system that encourages banks to take on more risk certainly does not help."

Reports of Dixons's demise exaggerated

The collapse of Comet, Jessops and HMV was bad news for choice on the high street, but good news for Dixons. The owner of Currys and PC World last week reported UK sales up 7% over the past year, with two factors behind that growth: high demand for tablet computers and the demise of its erstwhile rivals. Comet's failure alone put £1bn of sales up for grabs.

Only 18 months ago Dixons was in trouble. Its shares were on the floor at 10p and it was far from clear whether the retailer would be able to repay a £160m maturing bond.

Now it has £42m in the bank and the shares are up 50% this year to 42p. There are still problems – an estimated £30m loss at its hopeless (and for sale) Pixmania online business, and some £25m of losses in the economic wasteland that is southern Europe. But after restructuring costs, underlying annual profits were up 15% to £95m. That's quite a comeback.